Dr Charles Tannock

Member of the European Parliament for London

Re-thinking Europe's gas supplies after the Russia/Ukraine crisis

European Parliament - 26 January 2009

Cold homes and closed business due to gas shortages across much of Central and Eastern Europe in January thanks to the Russia-Ukraine gas dispute has prompted a re-think of supplies. The crisis has pushed energy security up the political agenda. A workshop on 19 January brought together academics and MEPs on the Foreign Affairs Committee to discuss Europe's options.

Earlier this month the full European Parliament discussed the crisis. Members from all sides agreed that Russia and Ukraine had lost their status of being reliable gas suppliers.

The importance of the issues at stake was underlined by Romanian Socialist MEP Ioan Mircea Pascu. He told the workshop last week: "This is the key geostrategic game of the next 50 years. Russia wants to rewrite the rules and to redraw the lines. We must react collectively, not by defending egoistic national goals".

The Polish MEP who chairs the Foreign Affairs Committee, Jacek Saryusz-Wolski of the EPP-ED group, called for greater diversification of supply saying it was "no longer a problem of energy but of foreign policy".

Charles Tannock, a British Conservative Member said that "reliability of trading partners and solidarity between EU members" was crucial for future security of gas supplies.


Gas pipelines - what are Europe's options?

The options facing Europe were discussed by those present.

One option is the "Southstream" project which is a Russian owned Gazprom proposal which would bring gas into the European Union from the Caspian sea and beyond via Turkey. However, Professor Alan Riley of City University in London said it would be too expensive: "All it is doing for the European consumer is increasing the price of gas."

Polish Liberal MEP Janusz Onyszkiewicz underlined the need for a European pipeline through Russia which is not controlled by state-owned Gazprom. At the moment, all pipelines through Russia but one is controlled by state organisations.

Another route under consideration is the Nabucco project which would bypass Russia using a new and existing pipelines going either from the Caspian via Georgia then across Turkey and turning north into the EU to an eventual distribution hub in Austria. This route could help Europe access Central Asian gas.

The "Nabucco light" option would be a cheaper route entering Europe via Turkey and Greece and then on to Italy for distribution. It is cheaper as it would use existing pipelines.

However, Professor Riley raised the issue of the legal uncertainty that surrounds the resources of the Caspian Sea as well as political instability in places like Azerbaijan and Turkmenistan. It would also not resolve where to get the gas from.

Another option - estimated at costlier than Nabucco - would be to build a Liquid Natural gas liquefaction plant in Ceyhan in Turkey where gas could then be shipped to Europe.


Diversification from Russia should be thought through

Danish MEP Christian Rovsing of the EPP-ED group underlined the potential of gas reserves below the Arctic ice caps: "The exploitation of gas and oil in the Arctic should be considered as a complementary source".

Dr. Andrew Monaghan, a researcher at the NATO Defence College in Rome, warned that the implications of a change in policy must be weighed: "We shouldn’t just move away from Russia without knowing where we are going. If we just exchange Ukraine by Turkey, we will still have all our eggs in one basket."

On 21 January, Parliament's industry Committee adopted a report by French MEP Anne on the "Second Strategic Energy Review", which will be on the agenda for the European Council on 19-20 March.

The report calls for emergency action plans, more grid interconnections among EU members and new climate targets to be achieved by 2050, including raising the share of renewable energy to 60% of total consumption.

The full European Parliament will be discussing the report on 2 February when they assemble in Strasbourg.

MEPs on the Committee also support diversification projects such as Nabucco, Turkey-Greece-Italy (TGI), and South Stream pipelines. They also acknowledge need of sufficient liquefied natural gas (LNG) capacity.